Buyer misses target date to close on old post office

Once again, plans to redevelop Chicago's behemoth old post office are on hold.

British developer Bill Davies defaulted Wednesday on his agreement to purchase the building for $40 million and appears in danger of losing his $4 million deposit.

While he has 10 days in which he can still close the transaction, some observers believe he tried to renegotiate the purchase price on Wednesday.

Exterior of the former main post office, which spans the Eisenhower expressway. (Tribune / Antonio Perez)MORE PHOTOS

A source said the Liverpool, England, multimillionaire now believes he would be overpaying for the building that spans the Eisenhower Expressway and not because he doesn't have the money.

Davies said in an interview Wednesday that he intends to buy the building and that he "was happy with the price." When asked why he didn't close the deal, Davies replied, "We have to get our plans approved by the city. We have to see the city's problems."

A statement from his attorneys' public relations firm said he had placed $41.2 million in escrow for the closing but Wednesday was "unable to reach an agreement on certain key issues." Those issues weren't defined.

U.S. Postal Service spokesman Mark Reynolds said if the deal isn't closed that the agency could hold another auction or approach the No. 2 bidder, Nathaniel Hsieh.

In an interview several weeks ago, Hsieh said he represented Chinese investors and complained that Davies didn't seem to have a price "ceiling."

Most bidders dropped out when bids reached between $10 million and $11 million. Hsieh could not be reached Wednesday.

"I think they got into a bidding war that they couldn't get out of," said Ald. Robert Fioretti (2nd), whose ward includes the post office. "That type of bidding war was not smart for this market."

The 14-story building on West Van Buren Street, which is between the size of McCormick Place and Willis Tower, has sat vacant since 1995.

Walton Street Capital initially had an agreement with the postal service to buy it for $10 and receive $62 million in federal and local incentives to fix it up. That deal fell through, prompting the auction.